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TMI Blog2024 (2) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... mera . As regards apprehension that the subject goods fall out of the purview of the Digital Still Image Video Camera, for the reason that recording time is not limited and in view of the aforementioned circular, it appears that the subject goods is not eligible for the benefit of S. No. 502 Notification No. 50/2017-Cus. However, the wording used in the said Circular lay emphasis on principal function and not excludes cameras which have the capability to record moving images for a unlimited period of time. Language used in the Circular is of inclusive nature, whereby under the term. Digital Still Image Video Camera includes digital cameras that take moving image for limited period of time although they are primarily still image cameras. This may lead to inference that exemption under the notification is admissible to only those digital cameras whose principal function relates to still photography even though such cameras are capable of recording moving images. Based on the reasons cited by the applicant in the application, said model of digital camera proposed to be imported by the applicant is principally a still image digital camera. Accordingly exemption under Serial Number 502 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n) sensor (with a sensor size of this camera is 35.9 mm 23.9 mm); these design elements make the subject goods more suited for still photography; the subject goods in addition to the capturing still images are able to record video for more than 30 minutes in a single sequence, however, maximum video recording capability is subject to temperature inside the camera caused by shooting modes, connectivity and other usages and storage space available in the internal/external memory. As regards other features, it is also stated inter alia that, the subject goods do not host any dedicated heat management module in line with its design language : these are made compact and lightweight due to the mirrorless technology it uses; the grip design used in the subject goods is a notable feature for still image cameras; these goods support almost all the essential and extended range of accessories including, but not limited to, speedlights, flash triggers, battery packs, remote controls and other still photography related accessories. 3. The questions on which advance ruling has been sought are as follows : (a) Whether the subject goods proposed to be imported by the applicant are classifiable und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preclude the CAAR from giving its advance ruling on that question. The possibility that a question would arise for consideration of a customs officer, appellate tribunal or court, is not a ground contemplated under clause (a) of the proviso to Section 28-I(2) of the Customs Act; in light or the above, the applicant is satisfying the afore-stated conditions; the applicant in the present case proposes to commercially import subject goods for sale in the Indian market; for the purpose of clearing the subject goods for domestic consumption, it is essential for the applicant to identify the correct classification under which such goods would be cleared and the applicable rate of customs duty thereon; therefore, it flows that in the present case, the applicant satisfies all the three-criteria required for filing the application for advance ruling, namely : (a) The applicant possesses a valid IEC Number 0507023927; (b) The application for advance ruling is in relation to clauses (a) (b) of Section 28H(2) of the Customs Act. (c) The application is not barred under proviso to Section 28-I(2) of the Customs Act. 4.2 The applicant has further stated that it is significant to note that the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amplified and converted to yield a visible image. This sub-heading excludes thermal imaging cameras (generally sub-heading 8525 89), ; it is important to note that the aforementioned definitions have been inserted into the HSN 2022 as part of Strategic Trade Control (STC) to protect the society from transnational acquisition of strategic weapons and goods used to develop or deliver them; it can be seen that the subject goods do not satisfy any of the conditions mentioned in sub-heading Note 1, 2 or 3 of Chapter 85 of Customs Tariff; the applicant submits and undertakes that the subject goods cannot perform the functions of radiation-hardened cameras, high-speed cameras and night-vision cameras; the subject goods are neither designed for the above stated functions nor has the capability of performing these functions; the cameras imported by the applicant are regular consumer goods for use in standard environments and use cases; thus, the subject goods are not classifiable under sub-headings 8525 81 00, 8525 82 00 and 8525 83 00 of the Customs Tariff; therefore, on application of Rule 6 read with Rule 1 of the GRI, the subject goods merit classification under the residuary sub-headin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity or the products and the need for a fresh notification was necessitated with the introduction of the GST regime; Digital Still Image Video Cameras were identically granted exemption under Serial Number 428A of Notification No. 12/2012; hence, it would be important to understand the scope of exemption entry under S. Nos. 428A of Notification No. 12/2012 and apply the same while interpreting S. No. 502 of Notification No. 50/2017; Serial Number 428A of Notification No. 12/2012 was introduced by virtue of Notification No. 28/2015-Cus., dated 30-4-2015; vide this Notification, conditional exemption was granted to Digital Still Image Video Cameras under the earlier entry to Notification No. 12/2012 was made unconditional; during this time, Letter D.O.F. No. 334/5/2015-TRU, dated 30-4-2015 was issued by the Ld. Joint Secretary, Ministry of Finance providing a summary of changes in Central Excise, Customs and Service Tax rates; vide this TRU Letter, it was provided, All Digital Still Image Video Cameras (DSC) falling under Tariff Item 8525 80 20 irrespective of their specification [including the restriction with reference to video recording time] and their parts are being exempted from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant has obtained BIS Certification for the subject goods under the category of Digital Cameras ; the categorization of subject goods under this segment further showcases that the subject goods are eligible to claim the exemption benefit; similar to classification, Section and Chapter Notes also act as guiding factor for claiming exemption benefit; Note 3 to Section XVI of Customs Tariff provides that unless otherwise required, the goods must be classified basis their principal function; keeping the aforementioned in mind, the applicant most humbly submits that it used to classify earlier models in the erstwhile Customs Tariff under CTI 8525 80 20 as digital camera basis their predominant function to click still images; in the present case, the subject goods can record videos in a single sequence without any limitation subject to storage and device heating; thus, the applicant submits that fresh assessment of eligibility to claim exemption benefit based on principal function of subject goods is necessitated; for this determination, following parameters of the subject goods become necessary to be understood : Design : The design of subject goods is small, lightweight, handy i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atures for better operation of movie recording capabilities which are usually not present in a Digital Still Image Video Camera. Essentially, the subject goods are a trade-off of some of the following features in order to keep such cameras smaller and lighter than the video cameras. One such feature is a Cooling Fan and video cameras are generally equipped with a cooling fan. This reduces the temperature inside the video camera and allows for longer duration of recording. The subject goods do not have a cooling fan making it less favourable to video recording usage. The subject goods have the capability of carrying out the function of still photography for longer durations with no significant battery or heating issues. However, although the subject goods have capability of video capturing, the function cannot be carried out for longer durations as the battery may face issues powering such a function and the heating issues become prevalent. Further, although the battery can be supported through external sources, the lack of a cooling fan disables the subject goods from longer duration video capturing. 4.4 Summarily, the applicant has submitted that, the subject goods primarily exhib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not fulfil the provisions of Section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the Authority; it appears that the application filed by M/s. Nikon India Private Limited merits rejection in terms of Section 28E(b) of the Customs Act, 1962. 6. In respect of the application for advance ruling, personal hearing took place on 1-9-2023 in virtual mode, wherein the advocate for the applicant started by referring to the comments of the concerned Commissionerate wherein it is stated that as per definition of advance ruling under Section 28E(b) of the Customs Act, 1962, there should be a written decision of advance ruling on the questions referred in respect of goods prior to its Importation, whereas the applicant is already involved in the importation of goods in question. The advocate mentioned that there is no bar in seeking advance ruling even if prior imports are there as this issue has already been settled, moreover before the date of filing of application for advance ruling, there were only 3 imports of the nature of sample and commercial import has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 50/2017-Cus. (Sl. No. 502). 9. Having completed the procedure laid down in the CAAR Regulations, I first allow the application, taking into account the facts of the case and submissions made by the applicant and the concerned Principal Commissioner of Customs. In view of the submissions made in the application for advance ruling, comments of the concerned Commissionerate, submissions made by the applicant during the personal hearing and their additional submissions. I proceed to discuss and give ruling on the following questions : (a) Whether the subject goods proposed to be imported by the applicant are classifiable under Customs Tariff Item 8525 89 00 of the Customs Tariff? (b) If the answer to question (a) is affirmative, whether the applicant can claim benefit under S. No. 502 of Notification No. 50/2017-Cus., dated 30-6-2017? (c) If the answer to the question (a) and/or (b) is in the negative, then, what is the appropriate classification of subject goods when imported along with accessories under the Customs Tariff and/or effective rate of duty under such appropriate classification? 9.1 I note that the applicant has proposed to import Nikon Camera Model No. N21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of entry at Sl. No. 314 of Notification No. 21/2002-Cus. as well as Sl. No. 13 of Notification No. 25/2005-Customs, dated 1-3-2005 would be available to digital cameras with still image recording as its principal function. This would also include those digital cameras that have the capability of recording moving images Tor a limited period of time. 9.2 I note that the concerned Commissionerate has neither commented on classification of the subject goods nor on applicability of Serial Number 502 of Notification No. 50/2017-Cus., dated 30-6-2017, on import of the subject goods. However, it is observed that the concerned Commissionerate has allowed import of the subject goods under sub-heading 8525 89 00 and extended exemption from Basic Customs Duty vide Notification No. 50/2017-Cus. (S. No. 502). The concerned Commissionerate has also inter alia commented that the applicant does not fulfil the provisions of Section 28E(b) of the Customs Act, 1962 to seek advance ruling in respect of the goods which are already being imported by them in commercial quantity before any written decision of the Authority; it appears that the application filed by M/s. Nikon India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges can be reproduced by connecting the camera to a video monitor (or TV) an ADP machine, or by inserting the media in the ADP machine. This type digital cameras can produce both video signals (e.g. NTSC, PAL, SECAM or other similar video format) and computer readable Image data like MPEG ; the term video relates to recording, reproducing or broadcasting of visual images; is a technology of electronically capturing, recording; processing, storing transmitting and reconstructing a sequence of still images representing scenes in motion; the term still Image video camera covers the type of camera that take still images and stores them as single frame of video; these single video frames when reproduced at a specified frame rate achieve an illusion of moving image; the minimum frame rate is about fifteen frames per second; the term digital still image video camera covers only digital camera that have the capability of taking still images; this would also include digital cameras that take moving images for limited period of time although they are primarily still image cameras; such cameras fall under Tariff Item 8525 80 20; however, digital cameras that can take both still images and mov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant has also stated that the subject goods do not satisfy any of the conditions mentioned in sub-heading Note 1, 2 or 3 of Chapter 85 of the Customs Tariff, the cameras imported by the applicant are regular consumer goods for use in standard environments and use-cases. 10.5 As regards apprehension that the subject goods fall out of the purview of the Digital Still Image Video Camera, for the reason that recording time is not limited and in view of the aforementioned circular, it appears that the subject goods is not eligible for the benefit of S. No. 502 Notification No. 50/2017-Cus., dated 30-6-2017. However, the wording used in the said Circular lay emphasis on principal function and not excludes cameras which have the capability to record moving images for a unlimited period of time. Language used in the Circular is of inclusive nature, whereby under the term. Digital Still Image Video Camera includes digital cameras that take moving image for limited period of time although they are primarily still image cameras. This may lead to inference that exemption under the notification is admissible to only those digital cameras whose principal function relates to still photography ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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